Canadian Prepaid Providers Organization (CPPO) second annual payments study reveals a movement towards alternative payment tools and away from traditional banking products for certain occasions and consumers
Toronto, ON – February 6, 2017 – A recent study has found that while 99 percent of Canadians have a bank account there is a growing interest, especially amongst younger Canadians, to adopt alternative payment tools that they view as more convenient. Prepaid cards continue to grow in both usage and popularity. At the same time, 13 percent of consumers are using bank accounts less.
The annual How Canadians Pay Today Survey of 1,006 Canadian consumers was conducted by Leger and commissioned by the Canadian Prepaid Providers Organization (CPPO), the voice of the rapidly growing prepaid payments industry in Canada. Prepaid cards issued by American Express, Mastercard and Visa reached $3.1 billion dollars in loads onto open-loop prepaid cards of all types in Canada in 2015.
“Canada has both a highly-banked population and many consumers with a strong willingness to try new financial services products,” said David Eason, CPPO co-founder and Chairman of the Board. “This year’s survey revealed that younger Canadians, in particular, are adopting emerging payment tools that are more convenient and secure. Prepaid cards topped the list as the fastest-growing payment product and boasted the highest level of satisfaction among payments tools.“
Other findings from the How Canadians Pay Today Survey include:
Canadians still use bank accounts and credit cards, but emerging payment tools are growing in adoption.
Ninety-nine percent have bank accounts, but 13 percent are using their bank accounts less. Ninety-two percent have credit cards, but 31 percent do not want to have one. Eighty percent do not like to carry a lot of cash, and 58 percent are making fewer cash purchases than last year.
The majority of Canadians (59 percent) have used alternative payment tools citing convenience as the main reason (70 percent).
Thirty-three percent of Canadians do not want to use traditional banks because alternative providers and new tools are cheaper and more convenient. Twenty-six percent of consumers want to move to more digital payment tools such as Apple Pay.
Eight percent more consumers are seeking out American Express, Mastercard and Visa prepaid cards compared to 2015.
Nearly half of these consumers make less than $40,000 per year, and over half (57 percent) are under the age of 45, with a third being under 35. Overall, an American Express, Mastercard and Visa prepaid card user is more likely to be: male, between the ages of 18 and 44, and a user of an alternative payment method.
Prepaid cards have the highest levels of growth of all payment tools.
Satisfaction with reloadable prepaid cards is 95 percent, up 22 percent from 2015. Satisfaction with single-use prepaid cards is 89 percent, up 14 percent from last year.
Sixty percent of consumers find it appealing to use prepaid cards to help their children manage their money.
Forty-seven percent of those with kids under 18 at home would consider doing this.
Canadians are concerned about the security of their debit and credit cards. They have fewer concerns about prepaid.
Sixty-six percent are concerned about the security of their credit and debit cards for online purchases. Nearly half of Canadians (47 percent) worry about the safety of funds for any purchase on credit and debit cards. Most Canadians (around 55 percent) express additional concerns about security and identity theft when using debit and credit abroad, but are significantly less concerned about security and identity theft when using an American Express, Mastercard, or Visa prepaid card (28 percent). The majority find it appealing that a prepaid card could make travel easier.
Canadians still struggle with budgeting.
Nearly half (44 percent) percent of Canadians have struggled to stick to a budget in the last year. Twenty-six percent often keep a running balance on their credit card, and 25 percent have struggled with their credit score. Forty percent have usually had credit card debt.
To access an infographic revealing the top survey findings, click here.
ABOUT PREPAID CARDS
American Express, Mastercard and Visa prepaid cards, also known as open-loop prepaid cards, are a cost-effective, flexible and easy-to-use payment tool. The cards can be used anywhere the card network (American Express, Mastercard and Visa) is accepted, including online and around the world. They are rapidly replacing cheques as a less expensive and more secure option for issuing payments. American Express, Mastercard and Visa prepaid cards look and function like traditional credit and debit cards at the point-of-sale and offer the same fraud and loss protections offered by the card network with a significant difference— they access a set amount of funds that have been pre-loaded by a consumer, by a government or by a business.
ABOUT THE CANADIAN PREPAID PROVIDERS ORGANIZATION (CPPO)
The CPPO is a not-for-profit organization and the collective voice of the open-loop prepaid payments industry in Canada. It is the only Association solely focused on this growing industry and is supported by major financial institutions, card networks, and other industry players. The CPPO is focused on awareness and education so that consumers and businesses can have the best experience with these popular products. Members of this not-for-profit organization include major financial institutions, payment card networks, program managers and key vendors that support the growth of this industry. Founding members include American Express (Amex Bank of Canada), Bank of Montreal, Berkeley Payment Solutions, Blackhawk Network, Home Trust Company, Incomm Canada, Mastercard Canada, Norton Rose Fulbright, Peoples Trust Company, RBC, Scotiabank, and The Fletcher Group LLC. For further information, visit www.cppo.ca. Connect with CPPO on Twitter and LinkedIn.
For further information, please contact: